Chrysler sets big price cuts

DETROIT -- Coming to your local Chrysler, Dodge or Jeep dealer: tractor-trailers full of cars and trucks with lower sticker prices.

DETROIT -- Coming to your local Chrysler, Dodge or Jeep dealer: tractor-trailers full of cars and trucks with lower sticker prices.

The big discounts are part of CEO Sergio Marchionne's attempt to revive the company the way he did Italian automaker Fiat.

His five-year plan for Chrysler Group LLC, to be unveiled Wednesday, calls for deep discounts across many models during the next 18 months. The goal is to lift sales, generate cash and keep the automaker going. That will give Marchionne time to try to revamp the company's struggling model lineup, according to a person briefed on the plan.

Some of the cuts already are in effect, like $1,970 off the 2010 Dodge Ram 2500 heavy-duty pickup truck. The 6.5 percent discount off last year's $30,135 sticker price is unusual for a new model year.

The reductions, made possible by expense cuts and lower parts and manufacturing costs, will continue as Fiat combines Chrysler's purchasing and manufacturing into its own lower-cost operations, said the source, who didn't want to be identified because the plan hasn't been made public.

Chrysler lost upward of $8 billion last year and would have run out of cash had the U.S. government not stepped in with $15.5 billion in aid. The automaker was forced into bankruptcy protection but emerged with far less debt and fewer burdensome contracts.

But the new Chrysler, left with an aging and unpopular model lineup, has struggled ever since the government installed Marchionne as its CEO in June. Sales are off 40 percent for the first nine months of the year and its share of the U.S. market has dropped to just over 9 percent.

Industry analysts say lowering prices might be the only lever Marchionne can pull to keep Chrysler alive while he tries to restock a model lineup that was practically left for dead by the automaker's two previous owners.

Marchionne plans to replace Chrysler's small and midsize vehicles with Fiat-designed products built in North America, the source said.